Ramsay Health Care has entered exclusive talks to acquire a majority stake in Generale de Sante, the largest private hospital operator in France, in a deal worth about €788 million ($1.2 billion) that would almost triple its hospital footprint in the country.
The company’s French joint venture with insurance company Credit Agricole Assurances, Ramsay Sante, has proposed to acquire the entire stake of GDS’ controlling shareholders, Sante SA and Sante Developpement Europe SAS. It has proposed to pay €16.75 a share for the 83.43 per cent stake, which would value Generale de Sante at $1.4 billion.
The joint venture has been granted exclusivity until June 6 to undertake due diligence, Ramsay said on Monday.
The latest deal by Ramsay, Australia’s largest private hospital operator, comes after the company’s founder and chairman Paul Ramsay died about a week ago. Mr Ramsay left his 36.2 per cent stake in the company to his personal foundation to fund charitable causes.
The proposed acquisition would be undertaken by the joint venture in the same proportions as the acquisition of the Medipsy chain of psychiatric hospitals from Generale de Sante for $223.6 million in December.
Ramsay said it could pay up to €539 million for a maximum economic interest of 57 per cent in the equity of Generale de Sante.
The Medipsy acquisition boosted Ramsay’s French operations, giving it 40 hospitals in the country, up from 10. But a successful acquisition of Generale de Sante would give Ramsay a further 75 facilities in France. The acquisition would be Ramsay’s fourth in the country since it acquired 57 per cent of the French hospital operator in March 2010 and follows the purchase of Clinique Convert in Rhone-Alpes in May 2011 and Clinique de l’Union in June.
Following the Medipsy deal Ramsay chief executive Chris Rex in December said the company planned to be a ”major player” in France. The Sydney-based company has a market value of $9.1 billion. Its share price rose 35 per cent in the past year and closed down marginally on Monday to $45.59.
Ramsay said it would fund its equity interest in Generale de Sante from debt facilities.
Unlike in Australia, where private hospital operators derive most of their revenue from health insurance companies, in France the government is Ramsay’s main funder.
Source: The Age